Columbia International Affairs Online: Working Papers

CIAO DATE: 07/2008

EU and U.S. Free Trade Agreements in the Middle East and North Africa

Riad al Khouri

June 2008

Carnegie Endowment for International Peace


Free trade agreements between the West (U.S. and EU) and Middle East and North African (MENA) countries, while containing beneficial elements, have strengthened negative perceptions of “western-led globalization” because they benefit unpopular elites and impose serious short term economic adjustment, concludes Riad al Khouri, a Carnegie Middle East Center economist specializing in MENA countries.

Examining the socio-economic and political effects of American and European trade agreements on Jordan, Morocco, and Egypt in EU and U.S. Free Trade Agreements in the Middle East and North Africa, al Khouri notes the more active pursuit of FTAs as an economic policy tool with political goals by the United States and the European Union in recent years.

Key Findings:
• Trade between the United States and MENA countries grew in a relatively balanced manner, while FTAs between the EU and the Mediterranean region favored the EU.
• Bilateral security cooperation between the United States and MENA countries strengthened after signing free trade agreements.
• The United States is keen on full trade agreements with MENA countries, in contrast to the EU, whose agreements with MENA countries do not include agriculture and immigration.
• If the EU and MENA countries could come to broader agreement on liberalizing agricultural products and promoting controlled immigration, the Southern Mediterranean region would benefit greatly.

He concludes:
“The current U.S. and EU initiatives are a step in the right direction, but they alone cannot lead to robust, sustainable growth in the MENA region or create regional stability. The overall growth and precarious stability that the region has been able to achieve still has little to do with bilateral economic links with the U.S. or the EU. Nevertheless, FTAs and similar agreements show signs of increasing importance for both the West and the MENA region, with implications for EU and U.S. trade relations with other regions as well.”